Six Thai banks to sustain improved earnings through 2026: Fitch

They are well-positioned to face risks after years of excessive provisioning.

Thai banks’ earnings have stablised thanks to economic recovery after the pandemic.

Six Thai banks– SCB X, TMBThanachart Bank, Bangkok Bank, Kasikornbank, Bank of Ayudhya, and Krung Thai Bank– are expected to be able to sustain their improved earnings over the next two years, Fitch Ratings said in a report.

“The interest rate cycle has peaked, but any declines may be limited and would have only a slight effect on margins. Bank earnings will also be supported by lower provisioning expensesm,” the ratings agency said.

However, asset-quality risks remain, particularly for borrowers in the SME and unsecured retail client segments. Regulatory forbearance on loan classifications has also expired. This has helped to smooth out non-performing loan migration during the pandemic, according to Fitch.

Despite these challenges, the six Thai banks are well-positioned to face risks after several years of excess provisioning, according to Fitch. 

“Core capital levels are also robust and will provide a sound buffer against risks,” it added.